Power reform bill advances

First stage of electricity law revamp clears Lower House

The House of Representatives passed a bill Friday to achieve the first stage of a major plan to reform the electricity sector, moving it closer to Diet passage.

The bill to revise the Electricity Business Law will be sent to the House of Councilors. The Liberal Democratic Party-led government seeks its passage during the ongoing Diet session, after it failed to enact it in the previous parliamentary session that ended in June.

The three-stage program is intended to create a more competitive market by allowing new entrants, bringing an end to the 10 utilities’ regional monopolies that proved vulnerable in the wake of the March 2011 earthquake and tsunami, and the subsequent crisis at the Fukushima No. 1 nuclear complex.

In the first stage of the reform, the subject of the current bill, the government will create an independent entity to take charge of coordinating power supply and demand nationwide by around 2015.

When a power crunch is feared in one region, the entity will be able to order utilities in other regions to share electricity or boost generation. Any utility defying the order could be fined.

In the subsequent stages, to be achieved by bills to be submitted in 2014 and 2015, the government plans to liberalize the retail market and separate the power generation and transmission businesses around 2018 and 2020.